Case
Study

MARKETING ON THE INTERNET

Galleon discovers golden key to Internet marketing

The Internet has come a long way in the last decade. For Galleon
Systems of Birmingham it has transformed the company’s approach
to marketing, enabling the company to sort out the genuine business
requirements from non-productive enquiries. But it doesn’t
happen overnight. “In 1999, following a review of the results
achieved from the company’s first web site, which was set up
in 1996, we set ourselves a four year plan, to exploit this marketing
channel fully. We wanted to improve our understanding of how the
Internet operates and to maximise its potential for finding new customers,” explains
managing director, Mark Neal.

As part of this strategy, the company has set up multiple sites,
each geared to distinct market segments and products. By applying
traditional thought to the new technology, the company has expanded
the proportion of the business attributable to leads from the Internet,
from around seven per cent in 1997, to over 80 percent today.

Marketing on the Internet follows a different set of rules to the
traditional concepts of advertising and publicity. “You cannot
think about it as sending electronic mail shots out to people. You
have to think about attracting people to come to you, to find out
more about who you are and what you have to offer,” says Mark.

Whilst the benefits of the Internet, as an open and global communications
tool, are generally well understood, there is one very significant
advantage which only becomes apparent by way of experience. And that
is, the business leads generated by the Internet are of far higher
quality than those received as a result of traditional publicity
techniques, using trade journals and exhibitions.

Galleon Systems markets computer enclosures and time synchronisation
clocks for specialist applications. Since it started receiving leads
from the Internet, the company has seen that in the majority of cases,
there is a definite requirement and the decision to buy has already
been made, before a search is initiated. Consequently a significant
proportion of Internet visitors are in fact potential customers,
whereas leads from trade advertising and exhibitions tend to be more
speculative. Galleon’s experience has shown that the conversion
rate is consistently high for enquiries generated by the Internet.”

“Being a marketing led company we have always been very thorough
in tracking sales leads. We use a system which enables us to identify
which advertising medium created the original enquiry. We did that
originally to evaluate the different trade magazines in order to
differentiate between leads which converted to actual sales rather
than those who were just gathering information. This also enabled
us to evaluate the effectiveness of exhibitions and direct marketing
projects.”

“In all these activities we focus on generating sales. The
rules have not changed; we have simply applied traditional thinking
to new technology. Fundamental to all our business processes is the
tenant that, if performance cannot be measured, then it cannot be
controlled. And this applies equally to the use of the Internet as
a marketing tool.”

Lessons learnt from Galleon’s experience can be applicable
to all types of businesses both large and small. Internet users rely
on search engines to act as agents. Firstly, by interpreting their
queries and secondly, by providing a list of web sites meeting the
search criteria. The aim of the website therefore is to achieve the
highest possible ranking with the various search engines. To do that
they must be designed in a way that is orientated to how search engines
operate.

Search engines look for target search words to decide whether a
web site matches a particular query. By using appropriate keywords,
web sites can be designed to increase visibility and thereby achieve
a higher ranking for presentation to the person making the search.

Galleon’s first site was created simply as an experiment rather
than for any serious commercial motive. “It wasn’t expensive
and it seemed to be a reasonable thing to do at the time,” said
Mark Neal.

Results were monitored by the company’s lead tracking system.
This showed that the web site was cost effective and within 12 months
it had accounted for seven percent of all new business. What was
surprising however, was the fact that although the sales were still
a relatively small proportion, the quality of leads from the Internet
were superior to the leads Galleon received from magazines, direct
mail or exhibitions.

“From our investigation we concluded that the Internet visitors
were hot prospects ready to buy when they found us. These people
had searched the Internet to find a product that they currently needed
and they were looking to buy, the only decision was who they were
going to buy it from,” said Mark Neal.

“This rammed home the potential power for Internet marketing.
For the first time we had a facility that it far better focussed
and closer to sharp-shooting our business objectives. So in 1999
we took a long term strategic decision to try and significantly increase
the number of leads we got from the Internet. “

To do this Galleon identified three goals for further investigation:

1. To improve ranking with the search engines, so that more people
could find the company and the products it wanted to sell.
2. The use of sponsored sites and pay-per-click services
3. The development of in-house expertise and knowledge about search
engine optimisation.

For each of these areas, Galleon set out to look for the software
support tools, training and marketing services that would be helpful
to achieving these goals.

For improved ranking

It is possible to pay for an agency service to create doorway pages
that will position or improve rankings in the search engines. These
agencies also offer various techniques and design ideas which will
help to improve the positioning of the web site with the search engines.
Effectively, the submission of the site is delegated to a third party
who promises to deliver a good position. As a matter of principle
Galleon did not permit these agencies to modify its website, to avoid
the risk of damaging the rankings with the search engines.

However, Galleon did use agencies to make doorway pages around the
specific search terms. Initially these worked quite well but the
downside was that the search engines started to penalise them for
spamming. Sales tracking analysis has also showed that the quality
of enquiries obtained via the doorway pages has diminished as alternative
techniques have developed. Consequently these methods are no longer
used and their ranking has progressively slipped away.

Sponsored sites and pay-per-click

The second area that Galleon looked at was the pay-per-click search
engines, such as Overture, Google adwords and Espotting. With these
facilities, the client pays to be at the top of the listing as a
sponsored site. Whilst this is a very quick way of getting to the
top of the search engines, it can be expensive. Prices vary from
10p per click up to £7 or more for every person that clicks
onto the target website. For a site attracting 1,000 visitors this
could amount to a significant outlay.

Galleon uses this method for specific keyword search terms. Costs
are controlled by using Galleon’s sales tracking analysis,
to monitor enquiries and ensure that these convert to customers at
an acceptable rate. On balance, pay-per-click is paying its way,
however, although this is an important source of business, it delivers
a much smaller volume of sales than the free search engines.

Developing expertise in search engine optimisation

Having committed to Internet marketing, the most important goal
for Galleon was in trying to raise its knowledge of both the process
and the requirements of search engines. This was a prerequisite to
understanding how the design or structure of the web page could influence
the positioning. Over a period of twelve months or so, Mark Neal
and his design team attended a number of seminars and training sessions
in the UK and North America.

According to Mark Neal, the courses in the USA were ahead of the
game as far as Europe was concerned. “Even today many people
think that all you need to do is to put a few keywords into the web
site metatags, but this will not ensure that you get a page one listing.
As competition has become more intense, attention to the small details
becomes crucial. Now it’s the last little bits of differential
that can deliver a page one listing for the web site with the search
engines.”

Put into practice by Galleon, these techniques have resulted in
a progressive improvement in the performance of the company’s
core web site. Additional sites have also been launched, targeting
specific market segments relevant to the company’s products.

The company has also refined its sales tracking tool, to look more
closely at visitors to the web sites. More detail was needed about
the search terms used for queries which converted into sales. Carrying
forward the 80 – 20 rule, where 80 percent of the business
comes from 20 percent of the enquiries, the website could then be
optimised, to achieve a better ranking in the search terms that actually
delivered customers.

Improved performance

Using these three methods has enabled Galleon to stay in control
and manage the development of its Internet marketing. By the fiscal
year end 2002, the company’s web sites account for 81 percent
of all new business. And because the Internet is a much more cost
effective marketing medium, than magazines and exhibitions, Galleon
has reduced its marketing spend by 55 percent over the same period.

Mark Neal stresses this point saying: “Effectively, the Internet
has enabled us to be more efficient, reduce our marketing spend and
increase our margins and therefore become a more profitable company,”

Continuing development

Another important lesson for the company was the fact that there
is no end-game or definitive answer to search engine marketing. Like
all activities in quality management it is continual cycle of measurement,
analysis, feedback, adjustment and control. In continuing its development,
Galleon uses a number of key suppliers for helping to monitor and
improve its quality performance. These include:

Search Engine Watch.com This organisation publishes a free newsletter
and also a subscription service offering more detailed guidance on
search engine optimisation. This was an important source for Galleon
in helping the company to start to understand more about the design
and the use of text to match popular search terms. They also provided
useful advice on search engines, the important ones and some of the
tricks and techniques used for improving web site positioning.

Another source of helpful guidance is Word Tracker.com a British
company which provides facilities for test searches on what might
be important search terms. They have access to a database of 300
million search terms and this can be used to evaluate all related
search terms for a particular product or service.

This was of particular value to Galleon because it allowed the company
to identify search terms that were more specific. Whilst these did
not attract a high volume of visitors, they were more specific to
the products the company wanted to sell. From Word Tracker, Galleon
learnt that people do search quite specifically, not in huge numbers,
but sufficient to justify focussing a web site at some of the more
obscure search terms.

Commenting on this service Mark Neal said: “By testing some
of the search terms designed to attract a high volume response, we
found that our web site would not have achieved a significant ranking
within the search engines to generate the traffic. It simply would
never have appeared. By going for the more obscure search terms,
however, we were able to lift the web site’s profile because,
paradoxically we were also getting the traffic for search terms that
included the big hitters for volume.

And that meant that we could get to the point where we were able
to tap the premier, high traffic volume search phrases. Effectively
it showed us how to use search terms as building blocks.

“Measurement is fundamental to the development of a successful
marketing web site,” says MarK Neal. “Initially we tried
to buy-in this resource but without success. All of tracking tools
we looked at had been designed for consumer orientated web sites
and not business to business (B2B) applications.

“Eventually we found one company which at least understood
our requirement. However, this relationship looked as if it might
be short lived, as we were informed that the company was being closed
down. So we decided to enter a joint venture with the ex-employees,
to develop a tracking solution specifically for B2B web site analysis.
Called Keyword Analysis.com, this venture has resulted in the creation
of a software tool that can track in detail, the visitors and search
terms that generated sales leads and subsequently customers.

“We recognised the opportunity because the concept builds
on Galleon’s existing practice of tracking sales leads. We
could appreciate the need to identify where those sales leads were
coming from, and which search engines and terms are important to
us. Common sense dictates that we should focus on what works best
and Keyword Analysis enables us to do that.”

An important benefit of keyword analysis is that it automatically
generates new search terms that are worth using to deliver more high
quality visitors. Another significant advantage was the ability to
identify the geographical location of the person making the enquiry,
where and when they accessed the site.

“This was an eye opener,” says Mark Neal. “By
identifying the keyboard used and the time zone of the person visiting
the site, we found that over 40 percent of our visitors came from
the USA. At that time we were not getting any sales from the USA
in any volume. This then led us to make the decision to develop a
web site specifically for the North American market. This went live
at the end of 2002 and it is now starting to generate sales.”

Conclusion – costs and benefits

Through investment and by building its expertise and making use
of these third party tools, Galleon has been able to sharpen its
approach to search engines. The payback is that it can better identify
business prospects and then track and control its web sites. This
has in turn, enabled the company to improve continuously the performance
of its sales lead / customer generation capability.

Even for a small company, the costs are affordable, coming easily
within the marketing budget benchmark of two percent of the sales
turnover value. Galleon writes its own marketing brief and passes
this over to a specialist company to create the web sites. A typical
investment for Internet marketing would be around €850 per month
per site. And that includes new web site development.

On web site design Mark Neal said: “We now have a different
view to web sites than before. Whilst appearance should be professional,
the most important objectives are to be search engine friendly and
then optimised for specific search terms.”

“When we design a new web site we will specify the products
we want to sell, the distinct customer groups and geographical regions
of the world, we want top sell to.
We then identify the search terms that the site will be designed
around. We will then design a web site and generate the text and
pictures for that web site. Once we have that we hand over to the
specialists to do the final design. It is important that the design
remains within the confines of the original specification. There
are only certain elements and software tools that the design company
will be allowed to use.”

The initial investment is in the design, development and writing
of the web site. On completion it will cost about €900 per site
to register with the search engines. For ongoing management Galleon
uses Search Engine Watch, Word Tracker and Keyword Analysis, which
add up to an on-going cost of €55 per month.

Summarising Galleon’s experience, Mark Neal describes Internet
marketing as crucial to the company’s future development. “We
saw the Internet as a better sales lead generator than anything else
because of the quality of sales leads it generated.”

“But Internet marketing isn’t something you can just
switch on, throw money at and be there instantly over night,” he
warns. “To achieve an effective web site ranking will take
about six months. And you have got to know what you are doing. We
are confident that we could get one up in six months were it will
become a web property that has value, and has a rating with the search
engines to ensure a useful shelf-life.

“Search engine marketing works for Galleon because we are
selling niche products. Perhaps this is typical of many companies
operating in the B2B sector, which will be thinking about Internet
-marketing. If so, then it is important that they understand the
potential value of an effective web site and we trust that they may
benefit from our experience.”